Side deals ‘loophole’ worries builders

Builders are worried that unions will be able to negotiate wide-ranging side agreements under rules approved by Workplace Relations Minister
Bill Shorten
ahead of a key Senate vote to overhaul the industry watchdog.

Mr Shorten has approved new guidelines for the national construction code, which sets conditions for builders who want to work on federally funded construction projects.

The guidelines maintain a ban on most unregistered written agreements. Yet such deals can be made voluntarily on a range of topics, including ways to reduce greenhouse pollution and waste, promoting apprenticeships and health programs.

Employers object to a broadly worded clause saying that unregistered written agreements are allowed for “initiatives to encourage fair, co-operative and productive workplace relations across the industry".

The Master Builders Association’s national director of industrial relations, Richard Calver, said the group was seeking clarification over the content of unregistered agreements because they appeared to offer a “loophole the size of Texas".

The guidelines require that all new enterprise agreements in the construction industry from May 1 will have to provide for last-resort arbitration of intractable disputes.

The existing Fair Work principles on procurement require that all new enterprise agreements allow for last-resort arbitration, even though this is not required by the Fair Work Act.

In Victoria, the Baillieu government plans to introduce its own industry guidelines, operating on a similar legal basis as those federally in setting out terms that must be agreed by companies wanting to undertake work for the government or its agencies.

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The federal guidelines state that they will prevail over state-based rules in the event of any inconsistency, but Victorian Finance Minister
Robert Clark
argued that Mr Shorten could not simply declare that this would occur because they were not law.

“However, on an initial reading, there is no reason why most, if not all, of the Victorian guidelines cannot operate in conjunction with the Commonwealth’s weakened guidelines, in other words, why tenderers can’t comply with both Commonwealth and Victorian guidelines."

The Construction Forestry Mining and Energy Union said most of its agreements already provided for last-resort arbitration, which was a “two-edged sword" favoured by different sides in different disputes.

The national secretary of the CFMEU’s construction division,
Dave Noonan
, said the new rules made “incremental" changes and only allowed unregistered agreements to cover a limited range of matters.

He said the rules covering employment of apprentices were not strong enough to counter the “disgraceful record" of many major builders on skills and training. “They whinge about skill shortages but they will not put any apprentices on."

The new guidelines also take a tougher line on employers using sham contracting to avoid paying employee entitlements. But Mr Noonan argued that the real problem here was the Fair Work Act, which allowed flagrant breaches because they had to be proven to be deliberate or misleading.

A ministerial spokesman said the new guidelines clarified that existing requirements under the Fair Work principles on dispute resolution also applied to the construction industry.

“Sham contracting is a fundamental breach of the guidelines. Employers found to have entered into such arrangements may be subject to sanctions."